Results

CEP discussion paper

Innovation partnerships for development along green value chains

Growth and development success stories are often linked to new technological waves and innovation success. Green technologies emerge as a new technology category in which innovation quality in Emerging and Developing Eco...Read more...

CEP discussion paper

Defense promotion and industrial development

Major economies are rearming, and rearmament is itself industrial policy. I ask whether defense promotion - especially innovation policy - can drive industrial development beyond the defense sector. I synthesize evidence...Read more...

Journal article

Journal of Law, Economics, and Organization:

Business groups as knowledge-based hierarchies of firms

We provide the first worldwide overview of the patterns of hierarchical differentiation across Business Groups (BGs), highlighting the coexistence of different hierarchical shapes. We show how the different shapes can ar...Read more...

CEP discussion paper

Trade within multinational boundaries

Traditional theories of firm boundaries predict trade between vertically related units of the same firm. Using novel data that combine a comprehensive mapping of U.S. multinationals' production networks with their custom...Read more...

CEP discussion paper

The Economics of climate innovation: technology, climate policy, and the clean energy transition

We examine the economics of climate innovation and its role in the clean technology transition. It outlines the incentives, market failures, and policy levers that shape the development and diffusion of clean technologie...Read more...

Blog

World Bank blogs:

Tax incentives for R&D can spur innovation and growth - when done right

As the debate around industrial policy intensifies, there is broad consensus on the rationale for government support to encourage private sector innovation. Economy-wide returns from research and development (R&D) in the...Read more...

CEP discussion paper

Multinational networks and trade participation

We provide a novel explanation for the dominance of multinational corporations (MNCs) in international trade: MNC affiliates face lower trade frictions in countries that belong to their parental network. Combining rich a...Read more...

CEP discussion paper

Multinational firms and global innovation

This paper provides an integrated analysis of multinational companies' global production and innovation. We establish novel stylized facts using rich data on the network of production affiliates and patent activity of Ge...Read more...

External report

Foreign Direct Investment

Multinational enterprises are at the centre of policy debates in low- and middle-income countries. As some of the most productive and innovative firms in the world, which are at the core of global supply chains, multinat...Read more...

Journal article

Industrial and Corporate Change:

More or the same? Radical, disruptive, discontinuous, and breakthrough innovation

This paper addresses the conceptual ambiguity in the literature on exceptional innovations, labeled ?radical,? ?disruptive,? ?breakthrough,? or ?discontinuous.? A bibliometric analysis of 4407 articles shows that differe...Read more...

CEP discussion paper

Global robots

The diffusion of automation technology raises questions about the future of work, leading to calls for policy interventions. The ongoing debate centers on the decisions made by technology adopters. In this paper, I study...Read more...

Journal article

The Economic Journal:

Globalization and conflicts: the good, the bad, and the ugly of corporations in Africa

Using a novel georeferenced datataset on the affiliates and headquarters of multinational enterprises between 2007 and 2018 together with georeferenced conflict data for the African continent, this work establishes a cau...Read more...

Journal article

Journal of Public Economics:

Organizational capacity and profit shifting

Good organizational capacity drives productivity and potential taxable profits, but may also enable multinationals (MNEs) to more efficiently re-allocate profits across tax jurisdictions, lowering actual taxable profits....Read more...

Journal article

Review of World Economics:

Curse or blessing? multinational corporations and labor market outcomes in Africa

Do multinational enterprises create local job opportunities in developing countries? We address this question in the context of Sub-Saharan Africa by combining information on domestic and foreign multinationals? affiliat...Read more...

Journal article

American Economic Journal: Microeconomics:

Technology transfer in global value chains

Global value chains create opportunities for North-South technology diffusion. This paper studies technology transfer in value chains when contracts are incomplete and input production technologies are imperfectly exclud...Read more...

Journal article

The Journal of Finance:

Tracing the international transmission of a crisis through multinational firms

We show that multinational firms transmit shocks across countries through their internal capital markets. We study a credit supply shock to parent firms in Germany. International affiliates outside Germany supported thei...Read more...

Journal article

Journal of Cleaner Production:

The interplay between innovation, standards and regulation in a globalising economy

To examine the different roles of regulation and standards in the age of globalisation, we hypothesize and investigate the relation of regulation and national and international standards on the one hand with innovation i...Read more...

Blog

Productivity Puzzles:

Why does the UK do so well on the Global Innovation Index? (Podcast)

How do we measure innovation and compare it across countries? And how can it be that the UK is doing so well as an innovation nation, while we seem to be underperforming on productivity?...Read more...

Journal article

Comparative Economic Studies:

Political connections, business groups and innovation in Asia

It is acknowledged that Asia?s remarkable economic achievements of the past 50 years build on institutional arrangements very different from the West, including the central role of business groups (BGs) as an organisatio...Read more...

CEP discussion paper

Responsible sourcing? Theory and evidence from Costa Rica

Multinational enterprises (MNEs) increasingly impose "Responsible Sourcing" (RS) standards on their suppliers worldwide, including requirements on worker compensation, benefits and working conditions. Are these policies ...Read more...

CEP discussion paper

Multinationals, robots and the labor share

Using a panel of Spanish manufacturing firms covering the 1990-2017 period, this paper shows that firms acquired by multinational enterprises experience a reduction in the labor share. Acquisitions drive significant chan...Read more...

Blog

Vox EU:

Knowledge flows from public labs to private firms

How knowledge spillovers operate between academia and private firms remains an open question. Antonin Bergeaud, Arthur Guillouzouic, Emeric Henry and Clement Malgouyres find strong spillovers through the contracting, mob...Read more...

Chapter

Research and innovation policies for the green transition

in Science, research and innovation performance of the EU 2022

This chapter provides a selective review of policies that can help foster a transition towards green technologies. R&I are crucial to tackling sustainability challenges, and public policies are needed to direct technolog...Read more...

Blog

LSE Business Review:

Political systems affect innovation

Innovation drives economic growth, however data indicates innovative capability differs across economies. Simon Commander, Saul Estrin and Thamashi De Silva suggest democracy is associated with more innovation overall, t...Read more...

CEP Insights

Productivity

Economics is the study of how to share out scarce resources. But it is also about how to make those resources less scarce by creating a bigger economic pie to share. The key to economic growth is increased productivity -...Read more...

CEP discussion paper

Epidemics and rapacity of multinational companies

Do multinationals engage in rent-seeking behaviour in developing countries during crises? With a difference in discontinuity approach, we use the Ebola epidemic in Liberia as a natural experiment on the sharp increase in...Read more...

CEP discussion paper

A policy toolkit to increase research and innovation in the European Union

What research and innovation (R&I) policies should Europe adopt? The world faces a challenge to rebuild after the pandemic, but also faces the same structural slowdown of productivity growth that occurred in the decades ...Read more...

CEP discussion paper

Omnia Juncta in Uno*: foreign powers and trademark protection in Shanghai's concession era

We examine how trademark protection - a prevalent but underexplored intellectual property right - affects international firms and market outcomes in an emerging economy. Exploiting the unexpected introduction of China's ...Read more...

CEP discussion paper

Business groups as knowledge-based hierarchies of firms

Hierarchical differentiation is a cornerstone of the organizing process. In this paper, we do three things. First, exploiting a newly assembled dataset, we provide the first worldwide overview of the patterns of hierarch...Read more...

Journal article

Research Policy:

Innovation, growth and the transition to net-zero emissions

The climate crisis and the global economic impact of the Covid-19 crisis occur against a background of slowing growth and widening inequalities, which together imply an urgent need for a new environmentally sustainable a...Read more...

CEP discussion paper

Innovation and human capital policy

If innovation is to be subsidized, a natural place to start is to increase the quantity and quality of human capital. Innovation, after all, begins with people. Simply stimulating the ?demand side? through R&D subsidies ...Read more...

CEP discussion paper

Opening up military innovation: causal effects of reforms to US defense research

For governments procuring innovation, one choice is whether to specify desired products (a "Conventional" approach) or allow firms to suggest ideas (an "Open" approach). Using a U.S. Air Force R&D grant program, where Op...Read more...

CentrePiece article

Innovation policy to restore American prosperity

The new US administration has the opportunity to reset an economic model that has failed to deliver prosperity for millions of Americans for decades. John Van Reenen calls for a Grand Innovation Challenge Fund ? federal ...Read more...

CEP Covid-19 analysis

Innovation for a strong and sustainable recovery

In the recovery from Covid-19, innovation and diffusion will be key to addressing several structural challenges facing the UK economy. These include improving the UKi??s longstanding poor productivity performance, addres...Read more...

CEP discussion paper

Gravity in international finance: evidence from fees on equity transactions

We shed light on the impact of institutional quality and information barriers on trade in financial services using a novel panel data set on revenue earned on domestic and cross-border equity securities underwriting tran...Read more...

CEP discussion paper

Managing global production: theory and evidence from just-in-time supply chains

Global value chains are highly fragmented across countries and dominated by a few large multinational firms. But the challenges of an increasingly difficult international business environment are raising the question of ...Read more...

Journal article

Fiscal Studies:

Have R&D spillovers declined in the 21st century?

Slow growth over the last decade has prompted policy attention towards increasing R&D spending, often via the tax system. We examine the impact of R&D on firm performance, both by the firm's own investments and through p...Read more...

CEP discussion paper

The intellectual spoils of war? Defense R&D, productivity and international spillovers

Abstract We examine the impact of government funding for R&D - and defense-related R&D in particular - on privately conducted R&D, and its ultimate effect on productivity growth. We estimate longitudinal models that rel...Read more...

CEP discussion paper

A toolkit of policies to promote innovation

Economic theory suggests that market economies are likely to under-provide innovation due to the public good nature of knowledge. Empirical evidence from the US and other advanced economies supports this idea. We summari...Read more...

Journal article

European Economic Review:

Host-country financial development and multinational activity

This paper evaluates the influence of host-country financial conditions on the global operations of multinational firms. Using detailed U.S. data, we establish that financial development in a country is associated with r...Read more...

Journal article

Tijdschrift voor Economische en Sociale Geografie, Journal of Economic and Human Geography:

The geography of foreign investments in the EU neighbourhood

This paper aims at investigating the drivers of Multinational Enterprise (MNE) investment in countries linked to the `core? of the European Union (EU 15) by different degrees of functional, economic and political integra...Read more...

Journal article

Economic Geography:

Innovation in Russia: the territorial dimension

The debate on Russia?s innovation performance has paid little attention to the role of geography. This article addresses this gap by integrating an evolutionary dimension in an augmented regional knowledge production fun...Read more...

Journal article

The Journal of Industrial Economics:

Spillovers in space: does geography matter?

Using U.S. firm level panel data we simultaneously assess the contributions to productivity of three potential sources of research and development spillovers: geographic, technological, and product market ("horizontal")....Read more...

CEP discussion paper

Do tax incentives for research increase firm innovation? An RD design for R&D, patents and spillovers

We present evidence of the positive causal impacts of research and development (R&D) tax incentives on a firm's own innovation and that of its technological neighbors (spillovers). Exploiting a change in the assets-based...Read more...

CEP discussion paper

Intrafirm trade and vertical fragmentation in US multinational corporations

Using firm-level data, we document two new facts regarding intrafirm trade and the activities of the foreign affiliates of U.S. multinational corporations. First, intrafirm trade is concentrated among a small number of l...Read more...

Government consultation

BIS - Productivity Plan inquiry

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CentrePiece article

In brief... A Global Apollo Programme to tackle climate change

Leading thinkers across the worlds of science, public service and academia have launched a new global programme to combat climate change. Richard Layard outlines their proposal for big public investment in research that ...Read more...

CEP election analysis

Productivity and Business Policies

UK productivity stagnated after the Great Recession of 2008-09 and remains about 15 percent below historical trends. This 'productivity puzzle' is due to a mixture of cyclical and structural effects - the fall is not ent...Read more...

CEP discussion paper

Innovation, reallocation and growth

We build a model of firm-level innovation, productivity growth and reallocation featuring endogenous entry and exit. A key feature is the selection between high- and low-type firms, which differ in terms of their innovat...Read more...

Journal article

The Quarterly Journal of Economics:

Does management matter? Evidence from India

A long-standing question is whether differences in management practices across firms can explain differences in productivity, especially in developing countries where these spreads appear particularly large. To investiga...Read more...

CEP discussion paper

Selection Effects with Heterogeneous Firms

We provide a general characterization of which firms will select alternative ways of serving a market. If and only if firms' maximum profits are supermodular in production and marketaccess costs, more efficient firms wil...Read more...

CentrePiece article

In brief... Two cheers for Anglo-Saxon financial markets?

We find that institutional ownership in publicly traded companies is associated with more innovation (measured by cite-weighted patents). To explore the mechanism through which this link arises, we build a model that nes...Read more...

CEP discussion paper

Global Value Chains During the Great Trade Collapse: A Bullwhip Effect?

This paper analyzes the performance of global value chains during the trade collapse. To do so, it exploits a unique transaction-level dataset on French firms containing information on cross-border monthly transactions m...Read more...

CentrePiece article

Big ideas: Innovation policy

In the last CentrePiece, John Van Reenen stressed the importance of competition and labour market flexibility for productivity growth. His latest in CEP's 'big ideas' series describes the impact of research on how policy...Read more...

SERC/Urban and Spatial Programme Discussion Paper

R&D, Innovation and Exporting

This study considers the determinants of whether a firm exports, undertakes R&D and/or innovates, and, in particular, the contemporaneous links between these variables using three waves of the UK Community Innovation Sur...Read more...

CEP discussion paper

Does Management Matter? Evidence from India

A long-standing question in social science is to what extent differences in management cause differences in firm performance. To investigate this we ran a management field experiment on large Indian textile firms. We pro...Read more...

CEP discussion paper

Spillovers in Space: Does Geography Matter?

Using US firm level panel data we simultaneously assess the contributions to productivity of three potential sources of research and development spillovers: geographic, technological, and product market (?horizontal?). T...Read more...

CentrePiece article

Europe's emissions trading scheme: taxpayers versus sthe industry lobby

The European Commission plans to tighten the greenhouse gas emissions targets in the Emissions Trading System. Ralf Martin and colleagues examine the likely impact on affected businesses, and conclude that industry is ex...Read more...

CEP discussion paper

Wage Bargaining and the Boundaries of the Multinational Firm

Do variations in labor market institutions across countries affect the cross-border organization of the firm? Using firm-level data on multinationals located in France, we show that firms are more likely to outsource the...Read more...

CEP discussion paper

Recovering the Sunk Costs of R&D: the Moulds Industry Case

Sunk costs for R&D are an important determinant of the level of innovation in the economy. In this paper I recover them using a Markov equilibrium framework. The contribution is twofold. First, a model of industry dynami...Read more...

CEP discussion paper

What if Congress Doubled R&D Spending on the Physical Sciences?

Many business, academic, and scientific groups have recommended that the Congress substantially increase R&D spending in the near future. President Bush?s American Competitiveness Initiative calls for a doubling of spend...Read more...

SERC/Urban and Spatial Programme Discussion Paper

Why Do Some Firms Undertake R&D Whereas Others Do Not?

Data for the UK show Northern Ireland remains at the bottom of the productivity league table, and that its R&D performance is consistently amongst the lowest across the UK regions. This paper analyses the data from a sur...Read more...

SERC/Urban and Spatial Programme Discussion Paper

Spillover and Backward Linkage Effects of FDI: Empirical Evidence for the UK

Recent work (including that of the author) on the impact of FDI has been based on microlevel (i.e. firms, establishments or plants) data, since this allows much greater control when examining such issues as whether FDI p...Read more...

CEP discussion paper

Accounting for Research and Productivity Growth Across Industries

What factors underlie industry differences in research intensity and productivity growth? We develop a multi-sector endogenous growth model allowing for industry specific parameters in the production functions for output...Read more...

CEP discussion paper

Innovation and institutional ownership

We find that institutional ownership in publicly traded companies is associated with more innovation (measured by cite-weighted patents). To explore the mechanism through which this link arises, we build a model that nes...Read more...

CEP discussion paper

Multinational Firms, Monopolistic Competition and Foreign Investment Uncertainty

This is a model of multinational firms, which introduces option value of foreign direct investment, into a framework of Dixit-Stiglitz type monopolistic competition. Starting from a pure trading equilibrium and solving f...Read more...

CEP discussion paper

Intra-Industry Foreign Direct Investment

We use a new firm level data set that establishes the location, ownership, and activity of 650,000 multinational subsidiaries?close to a comprehensive picture of global multinational activity. A number of patterns emerge...Read more...

CEP discussion paper

Uncertainty and the Dynamics of R&D

Uncertainty varies strongly over time, rising by 50% to 100% in recessions and by up to 200% after major economic and political shocks. This paper shows that higher uncertainty reduces the responsiveness of R&D to change...Read more...

CEP discussion paper

An R&D-Based Model of Multi-Sector Growth

We develop a multi-sector general equilibrium model in which productivity growth is driven by the production of sector-specific knowledge. In the model, we find that long run differences in total factor productivity grow...Read more...

CEP discussion paper

Strategic Patenting and Software Innovation

Strategic patenting is widely believed to raise the costs of innovating, especially in industries characterised by cumulative innovation. This paper studies the effects of strategic patenting on R&D, patenting and market...Read more...

CEP discussion paper

Knowledge Flow and Sequential Innovation: Implications for Technology Diffusion, R&D and Market Value

It is shown that spillovers can enhance private returns to innovation if they feed back into the dynamic research of the original inventor (Internalized spillovers), but will always reduce private returns, if the origina...Read more...

CEP discussion paper

Identifying Technology Spillovers and Product Market Rivalry

The impact of R&D on growth through spillovers has been a major topic of economic research over the last thirty years. A central problem in the literature is that firm performance is affected by two countervailing ?spill...Read more...

CEP discussion paper

Multinationals and US Productivity Leadership: Evidence from Great Britain

We study the productivity of US owned plants in the UK. Using a new dataset that identifies foreign and domestic MNEs, we find that UK MNEs are less productive than US affiliates, but as productive as non US foreign affi...Read more...

CEP discussion paper

How Special is the Special Relationship? Using the Impact of US R&D Spillovers on UK Firms as a Test of Technology Sourcing

How much does US-based R&D benefit other countries and through what mechanisms? We test the 'technology sourcing' hypothesis that foreign research labs located on US soil tap into US R&D spillovers and improve home count...Read more...

CEP discussion paper

Corporate R&D and Productivity in Germany and the United Kingdom

This paper analyzes differences in R&D spending and in the impact of R&D on productivity between German and UK firms. We confirm that German firms spend significantly larger amounts on R&D than their UK counterparts, eve...Read more...

CEP discussion paper

Investment, R&D and Financial Constraints in Britain and Germany

This paper tests for the importance of cash flow on investment in fixed capital and R&D using firm-level panel data in two countries between 1985 and 1994. For German firms, cash flow is not informative in simple econome...Read more...

CEP discussion paper

Measuring the Cost Effectiveness of an R&D Tax Credit for the UK

This paper investigates the economic impact of the government's proposed new UK R&D tax credit. We measure the benefit of the credit by the effect on value added in the short and long?run. This is simulated from existin...Read more...

CEP discussion paper

R&D in Developing Countries: What Should Governments Do?

I consider the implications of recent research for R&D policy in developing countries. Typical new growth models, which assume free entry and no strategic behaviour by R&D producers, are less appropriate for policy guida...Read more...

CEP discussion paper

Mapping the Two Faces of R&D: Productivity Growth in a Panel of OECD Industries

Many writers have claimed that R&D has two 'faces'. In addition to the conventional role of stimulating innovation, R&D enhances technology transfer by improving the ability of firms to learn about advances in the lead...Read more...